How does learning by doing affect average total costs?Short-run average total costs will remain unchanged because any gain in employee productivity will be exactly canceled out by increased fixed costs.Short-run average total costs will fall because employees learn which production processes work and become more productive given the available inputs.Short-run average total costs will rise because firms will hire employees that have failed in previous jobs, causing decreased productivity.Short-run average total costs will rise because employees will continually fail, causing training costs (variable costs) to increase for the firm.

Learning by doing is a process of achieving productivity through practice, innovations, and…

Answered: How does learning by doing affect…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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How does learning by doing affect average total costs?

Short-run average total costs will remain unchanged because any gain in employee productivity will be exactly canceled out by increased fixed costs.
Short-run average total costs will fall because employees learn which production processes work and become more productive given the available inputs.
Short-run average total costs will rise because firms will hire employees that have failed in previous jobs, causing decreased productivity.
Short-run average total costs will rise because employees will continually fail, causing training costs (variable costs) to increase for the firm.

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